If 12 shareholders are organizations holding 50% or more, must the joint stock company have a Supervisory Board in Vietnam?

If 12 shareholders are organizations holding 50% or more, must the joint stock company have a Supervisory Board in Vietnam?

Pursuant to Point a, Clause 1, Article 137 of the Law on Enterprises 2020, there are provisions on the organizational and management structure of joint stock companies as follows:

1. Unless otherwise prescribed by securities laws, a joint stock company may choose one of the following models:

a) A joint stock company with the GMS, Board of Directors, Board of Controllers and Director/General Director. If the joint stock company has fewer than 11 shareholders and the shareholders that are organizations hold less than 50% of the company’s total shares, a Board of Controllers is not mandatory;

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Thus, when choosing to operate under this model, depending on the circumstances, it is required to have a Supervisory Board or not. In case a joint-stock company has less than 11 shareholders and the shareholders are organizations holding less than 50% of the total shares of the company, it is not required to have a Supervisory Board. In case these two conditions are not met, a Supervisory Board is required in Vietnam.

Therefore, it can be determined that the joint-stock company with the above shareholders being the organization owning 50% or more of the total shares of the company is required to have a Supervisory Board.

When can shareholders in Vietnam ask a joint stock company to buy their shares?

Regulations on shareholders requesting the company to redeem shares are recorded in Clause 1, Article 132 of the Law on Enterprises 2020 as follows:

1. The shareholders that have voted against the resolution on reorganization of the company or change of shareholders’ rights and obligations in the company's charter are entitled to request the company to repurchase their shares. The request shall be made in writing and specify the shareholder’s name and address, quantity of shares of each type, offered prices, reasons for requesting the repurchase. The request shall be sent to the company within 10 days from the day on which the previously mentioned resolution is ratified by the GMS.

Thus, when shareholders vote not to pass a resolution on the reorganization of the company but want to request the company to buy back shares, within 10 days from the date of the General Meeting of Shareholders to approve the resolution on the above issue, they must send a request to the company in Vietnam.

Best Regards!